In response to layoffs threatened by Mayor Rahm Emanuel, Chicago's labor leaders have made a set of proposals they believe will save the city hundreds of millions of dollars a year, starting with free competition with the private sector.

The savings would more than offset the hole in the budget that prompted Emanuel to send layoff notices to 625 city workers earlier this month. Those pink slips came out as a result of a deficit of only $30 million.

At a press conference Tuesday morning, leaders of the Chicago Federation of Labor and the Chicago Building Trades Council rolled out a three-pronged plan [PDF] that they say will come to a total of $242 million in annual savings.

"When did public employees become the enemy?" the report asks. "City employees pick up our trash, fix our streets, teach our children, treat the sick, keep our streets safe – they perform a whole host of other duties that most residents take for granted.

"Governments and their employees can work together to find savings and increase efficiency."

The first point in labor's plan is that the city essentially ought not to take for granted what's right under its nose. City workers, the report argues, are actually much cheaper than private companies in many cases, and if the city would give its unions the chance to prepare and make a competitive bid against private entities, it would see the benefits in its bottom line. Not to mention, of course, keeping jobs in Chicago and making sure workers are protected and guaranteed a decent wage.

Cities like Tulsa, San Diego, Phoenix and Indianapolis have implemented this kind of competition, and have seen millions of dollars of savings on various union contracts, according to the report.

"If managed competition saved Chicago just 10 percent of its estimated $400 million in professional, technical, skilled and general labor contracting costs, the City taxpayers would achieve $40 million in savings," it concludes.

It also makes a point that was widely anticipated: that there are too many managers on the city's payroll. The report predicts a $37.5 million savings from reducing the number of managerial positions around city agencies.

The biggest chunk of projected savings, $165 million, comes from a bundle of other recommended efficiencies. These could be identified in a city-wide performance review, which have yielded savings of hundreds of millions of dollars in other states.

Before the unions released their report, Mayor Emanuel was asked in a press conference about the prospective recommendations from labor.

"I haven't seen the report .. but I look forward to seeing it," he said, according to NBC Chicago. "I'm happy that labor now is putting forward their ideas. I welcome the report."

But he didn't appear ready to give up on his proposed work-rule changes, which he put forth weeks ago as an alternative to the layoffs he'd suggested. Those nine proposals included paying time-and-a-half for overtime, instead of double-time; working a 40-hour week, instead of 35; cutting down sick days and holidays; and several other reforms that would limit workers' pay and benefits.

Whatever the union's proposals, that "doesn't take away from every other part of the budget that needs to be scrutinized," Emanuel said, according to theChicago Tribune. "Every specter of the city budget is open for review."

While the unions have mostly held firm in opposition to the work-rule changes, one has recently conceded to the mayor to stave off layoffs. The cement mason's union agreed to the time-and-a-half overtime rule, in order to prevent six of its members from losing their jobs.